Looking at some Amica insurance plans. They have quoted me dividend and non-dividend plans for each policy. The potential 20% dividend puts their pricing just slightly better than a non-dividend plan. For instance, on my auto insurance policy, at 20% it would be $22 cheaper than a non-dividend policy.

My thought is that I will choose the non-dividend policy. I'd rather pay $22 more and know the exact price and have no risk.

My experience with Amica is limited. I have auto, home, and umbrella with them. I'm in the process of starting my 2nd year with them as a policyholder. I go with the dividend option because there's a high probability that my premiums will be lower over time (assuming there is no increase in coverage or bad marks in our policy history going forward). I don't take their dividend checks. Instead, I request them to apply it to future payments on a monthly basis. This makes our budgeting easier. For me, the non-dividend option guarantees that I'll be paying higher premiums over the dividend option.

jeffyscott wrote:These options were never brought up to me, when I signed up with them they only quoted the non-dividend policies.

But, since the dividend is not guaranteed, I'd think take the certainty of paying $22 more over the risk of paying 20% more. (I'm assuming the $22<<20%)

What happens with the dividend if you drop them and go to a different company?

That was my thought as well. I chose the non-dividend plan. If they had a history of paying out a 30-50% dividend, I would have gone that way. But the fact that the difference was essentially the same as the dividend payment (like a $20 difference on a $1300 policy) it was worth it to me to pay a tad more for a secure price.

We came across this discussion and thought we could offer some information that may be of assistance:
As you’ve stated, the dividend option provides a lower total overall insurance cost with the benefit of a dividend at the end of the year. Once your policy expires, the dividend is paid to you. We do not take claims you've filed into consideration when paying the dividend, and while they are based on the company’s past performance and are not guaranteed, any changes to your dividend policy would be made upon renewal.
While we offer dividend policies in many states, our dividend policies are not available in every state or for every line of business, which is why some customers may not receive dividend quotes.
We hope this has been helpful to you. We also have a page on our website that explains the dividend feature in more detail: http://www.amica.com/products/dividends.html. Or feel free to call us at 800-242-6422 if you have additional questions.

Note from admin alex - I've reviewed this and it is acceptable. We do not consider it solicitation when company reps confine themselves to answering direct questions about their products.

AmicaInsurance wrote:We came across this discussion and thought we could offer some information that may be of assistance:
As you’ve stated, the dividend option provides a lower total overall insurance cost with the benefit of a dividend at the end of the year. Once your policy expires, the dividend is paid to you. We do not take claims you've filed into consideration when paying the dividend, and while they are based on the company’s past performance and are not guaranteed, any changes to your dividend policy would be made upon renewal.
While we offer dividend policies in many states, our dividend policies are not available in every state or for every line of business, which is why some customers may not receive dividend quotes.
We hope this has been helpful to you. We also have a page on our website that explains the dividend feature in more detail: http://www.amica.com/products/dividends.html. Or feel free to call us at 800-242-6422 if you have additional questions.

Note from admin alex - I've reviewed this and it is acceptable. We do not consider it solicitation when company reps confine themselves to answering direct questions about their products.

Wow!! If this is posted with "admin alex" seal of approval, I take it a great sign that Amica cares about its policyholders!! I'm only in my second year of continuing my business with them (auto, home, and umbrella). This coupled with the fact the Amica is on top for homeowner's insurance based on Consumer Reports surveys.

So I'm new to this forum and to the dividend insurance option. I have some questions if anyone is willing to field to help me understand the choice:

1. By taking the dividend option, are we effectively shareholders but without the protections afforded traditional shareholders?
2. Do they offer the dividend option because they have found that people are less likely to report damage if they know if will effect the overall amount of money available for dividends?
3. Is this almost a form of self-insurance? Where we are loaning the money to avoid the necessity of re-insurance?
4. If the dividend is not taxed, is it a sort of tax shield?
5. Could Amica offer a negative dividend, i.e. to withdraw a higher amount of money from its insured clients to offset catastrophic risk?